Chinese steel producers received official iron ore offer prices for the second quarter this year from Australian giant miner Rio Tinto last Friday (May 21), with the new offers $3-10/mt higher than the previous provisional prices set by the two sides. According to Rio Tinto's official offers, the FOB price of fine ore of 63.5 percent Fe content is $123/mt and price of lump ore is $138/mt FOB.
According to a senior official with one northern Chinese steel mill, the price hike made by Rio Tinto will necessarily force Chinese steelmakers to pay a considerable amount of money in compensation for the price difference with the previous provisional price.
A spokesman for Rio Tinto stated that the company has reached agreement with other steel mills in Asia on iron ore contract prices, though he declined to disclose the details.
According to the final second quarter pricing of iron ore in the Japanese import market, Brazilian iron ore offers are at $110/mt while Australian offers are at $120/mt, both twice the benchmark price in 2009.